‘Hilton and GAIA could interest private sector’
The vexing issue of privatization of state entities was glaringly missing from yesterday’s Financial Statement and Budgetary Proposals.
However, rekindling the discussion on the matter, Advisory Partner at PricewaterhouseCoopers (PwC) Oliver Jordan said while there had been focus on the sale of the Barbados National Terminal Company Limited in recent times, there were other state agencies that might be of interest to the private sector.
He listed the Hilton Barbados Resort and Grantley Adams International Airport among the state-owned agencies that the business community could consider owning.
“There needs to be some discussion as to what entities can be privatized and we can use the proceeds from that privatization to help reduce the debt,” Jordan proposed, adding that privatization did not have to lead to job losses.
Addressing the Barbados Chamber of Commerce and Industry and PwC post post-budget discussion at the Hilton Barbados Resort today, Jordan also warned that Government needed to try to meet the conditions of financial institutions, including the Inter-American Development Bank (IDB) and Caribbean Development Bank (CDB), in order to get outstanding loans, some of which could be put towards lowering the deficit.
Jordan said a number of loans had been approved for “a number of years”, but Government was unable to access these loans because it did not meet all the conditions.
Meanwhile, Chairman of the Barbados Private Sector Association (BPSA) Charles Herbert, without going into details, suggested that the automotive operation of the Transport Board should be transferred to private operators.
However, he cautioned against the sale of state assets to overseas investors, while explaining that the private sector was losing confidence because pending capital inflows for new projects had not materialized.
“It is hard for us to have confidence because we are hearing about some of these projects for several years. The other thing that bothers us in the long-term is that it is not sustainable for Barbados to finance its foreign exchange demand by continually selling off local assets,” he said.
Adding that there was a limit to the number of assets Government could sell, Herbert said: “The more we sell them, especially if we sell them with concessions, we grow our tax base and erode the income that’s left behind in the island.
“So it is a good short-term measure, but for the long-term Barbados has to figure out how we can either reduce our demand for foreign exchange or finance it out of our current operations. It’s just not a long-term strategy, and we didn’t see anything in the budget that realize that we don’t have
a long-term solution to finance our foreign exchange demand.”
The BPSA head also expressed disappointment that Sinckler did not address issues surrounding the ease of doing business.